How ATM Innovation is Helping Extend Services to the Underserved

By : Anna Wasicka

June 05, 2018 12:00 PM

Making financial services available in more remote, hard-to-access areas is an ongoing challenge for banks, not only in large, geographically diverse countries like India, but also in smaller, equally significant markets like the UK.


One trend proving particularly important in the ongoing mission to improve financial inclusion is innovation in the ATM channel. The growing sophistication and flexibility of self-service devices is helping to improve service availability for customers, and maximizing efficiency and revenue opportunities for banks. This includes the extended customer catchment area that financial institutions can achieve by expanding their self-service install base.


The inclusion benefits of ATM innovation


Recent evolution in the ATM channel has included the growth of solutions such as cash recycling. Making deposited cash available for withdrawal helps to optimize availability for customers, while reducing replenishment costs by maximizing the CIT cycle for the bank.


Paired with an effective cash management and forecasting strategy, cash recycling can help ATMs to achieve maximum efficiency and reliability, improving financial inclusion even in the most remote areas that may be difficult to reach on a regular basis by a cash-in-transit (CIT) company.


NCR recently showed how this strategy can be put into action with the introduction of SelfServ Select Edition Cash and Recycle ATMs in India. These small-footprint machines will help financial institutions make services available to the country's unbanked citizens - who currently make up nearly a fifth (19 percent) of the population. The new ATMs will allow financial institutions to modernize their ATM network, improve customer experience and extend their reach to serve areas where cash demand is strong.


India is still very much a cash-based economy, with more than half of all retail transactions completed using physical currency. In November 2016, the government took the surprise decision of removing all existing 500 rupee and 1,000 rupee banknotes from circulation. In spite (or perhaps because) of this, the number of ATM transactions has risen by 27 percent since November 2016, according to figures from the Reserve Bank of India.


A global challenge


It's not only in India that a large proportion of the population remain heavily reliant on cash and financial exclusion continues to pose a significant challenge.


Retail Banking Research recently highlighted trends in Southeast Asia, where banks are expanding and modernizing their self-service networks to reach unbanked populations and underdeveloped rural areas. Indonesia is the region's largest ATM market, with the number of machines passing the 100,000 mark in 2016. Introduction of small-footprint cash recyclers in more locations could help to address the fact that a large portion of the population are unable to access banking services.


In the UK, meanwhile, consumer group Which? recently warned that insufficient ATM availability could place a considerable strain on communities that rely on access to cash. Having good access to ATMs is particularly important in locations that have been affected by branch closures.


By taking full advantage of the benefits of small-footprint, low-cost ATMs and efficiency-driving solutions such as cash recycling ATMs, financial institutions can keep costs under control while continuing to ensure customers can access the services they need.